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1994 SCMR 1893

Ch. GHULAM NABI vs Mirza JAVAID IQBAL

Citation1994 SCMR 1893
CourtSupreme Court of Pakistan
Case No.Civil Appeal No, 304 of 1994
Date1994-06-07
Judge(s)Ajmal Mian, Wali Muhammad Khan
ResultAppeal dismissed

AJMAL MIAN, J.---This is an appeal with the leave of this Court against the judgment dated 19-12- 1993 passed by a learned Single Judge of the High Court of Sindh in Revision Application No, 142 of 1992 filed by the appellant against the judgment and decree of the learned III Senior Civil Judge, Karachi, dated 24-5-1992 and of the learned District Judge, Karachi (South), in Suit No, 1280 of 1991 and Civil Appeal No, 213 of 1992, whereby the award dated 12-8-1991 given by the Chairman, Pakistan Film Distributors' Association, Karachi, was made rule of the Court, which was maintained in appeal, dismissing the same. Leave to appeal was granted to consider, whether the ratio decidendi of the the judgments of this Court in the case of Pakistan through General Manager, Pakistan Railways v. Messrs Q.M.R. Expert A Consultants (PLD 1990 SC 800) and the case of M/s. Awan Industries Limited v. The Executive Engineer, Lined Channel Division and another (1990 SCMR 65) was applicable to the case in hand.

2. The brief facts are that the respondent filed an application under sections 14 and 17 of the Arbitration Act on or about 14-1-1992 alongwith the award dated 12-8-1991 in the Court of Senior Civil Judge (South), at Karachi. The operative protion of the award reads as follows:-- "The nutshell is that we, therefore, give an award against the respondent that the respondent should pay Rs,1,85,285 to the claimant and execute sufficient instrument regarding Nishat Cinema, Pattoki, in respect of share of Malik Khadim Hussain and Safdar Ali etc. Within 15 days from the date of receipt of copy of this Award."

' The above application was registered as Suit No, 1280 of 1991. One Syed Jalil Ahmed Hashmi for the appellant appeared and filed Vakalatnama on 20-10-1991. The suit was subsequently transferred to the Court of III Senior Civil Judge, Karachi (South). It seems that the learned counsel for the appellant waived the Court Motion Notice on 2-12-1991. The case was adjourned to 18-12-1991 for filing written statement to the objections filed by the appellant. None appeared for the appellant on the above date, but the case was adjourned to 23-124991. On the latter date also, nobody appeared on behalf of the appellant. Consequently, the award was made rule of the Court on the above date. The appellant filed an application under Order IX, Rule 13, C.P.C. For setting aside the above order dated 23-12-1991 on the ground that the Advocate by mistake noted next date as 2-1- 1992 instead of 18-12-1991. The above application was resisted by the respondent and inter alia it was pleaded that the same was barred by limitation as Article 158 of the Limitation Act provided a period of 30 days and that section 5 of the above Act was not applicable. On merits also it was contested. The learned Civil Judge by his order dated 4-5-1992 dismissed the above application.

The matter was taken to the learned District Judge (South), Karachi, through the above Civil Appeal, which was dismissed on 23-5-1991. Against the above judgments, the appellant filed aforesaid revision application, which also failed. Thereupon, the appellant filed a petition for leave to appeal, which was granted to consider the above question.

3. In support of the above appeal, Mr. M.G. Dastgir, learned ASC appearing for the appellant, has urged that since the subject-matter of the reference was situated in Tando Mohammad Khan, the award could not have been filed in the Court of Senior Civil Judge at Karachi because of section 2

(e) and section 31 (1) of the Arbitration Act, 1940, here in after referred to as the Act. His further submission was that in view of the above judgments of this Court, it was incumbent upon the Court of the learned Senior Civil Judge to have noticed itself the above jurisdictional defect notwithstanding that the appellant failed to raise the same before it.

4. In order to appreciate the above contentions it may be pertinent to refer to the above provisions of the Act, which read as follows:- " Section 2(c) of Arbitration Act:

(c) 'Court' means a Civil Court having jurisdiction to decide the question forming the subject- matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court."

" Section 31(1) of Arbitration Act:

31. Jurisdiction.--(1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates."

It may be noticed that under clause (c) of section 2 of the Act, "Court" has been defined as means a Civil Court having jurisdiction to decide the question forming the subject-matter of the reference if the same had been the subject-matter of a suit. It may further be noticed that subsection (1) of section 31 provides that subject to the provisions of the Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates.

5. In this case it is an admitted position that no objection was raised by the appellant before the original Court of the Senior Civil Judge where the award was filed or before the transferee Court, namely, III Senior Civil Judge, Karachi (South) as to the jurisdiction of the said Court. On the contrary, none appeared for the appellant in spite of service of the notice. In this behalf, it may be pertinent to refer section 21 of the C.P.C., which reads as follows:-- "21. No objection as to the place of suing shall be allowed by any appellate or revisional Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice."

A plain reading of the above section indicates that no objection as to the place of suing can be allowed by any appellate or revisional Court unless such objection was taken in the Court of the first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice. In other words, by virtue of the above provision of C.P.C., appellate or revisional Court is precluded from allowing objection as to the place of suing, whereas in the Court of first instance, such objection can be raised but that too at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice. The above provision is attracted to in the present case and, therefore, the High Court was justified in not allowing the above objection though it has also touched upon the merits of the above objection adversely.

6. As regards the above two judgments of this Court, it may be observed that Mr. Dastgir has relied upon para. 10 of the judgment in the case of Messrs Q.M.R. Expert Consultants (supra), which reads as follows:- "10. It was also urged by Mr. Fazal-i-Hussain that after the passing of the judgment by the High Court, the learned Civil Judge acted in haste inasurnch as he made the award rule of the Court within 10 days and then issued attachment order attaching the Head Office of the Railways at Lahore. As the above point is not in issue before us, we would not like to comment upon the same.

However, we may observe that under section 17 of the Act, it is the duty of the Court to examine, whether there was any reason for modifying of the award or for setting aside the award notwithstanding that an affected party may have failed to file objections to the award on account of the expiry of the limitation period or the parties to the arbitration proceedings may be in collusion and because of that, they may not file any objection to a collusive award. If any authority is needed, reference may be made to the case of Union of India v. Pratap Chandra Biswas AIR 1964 Assam and Nagaland 141, in which a Division Bench of the above High Court held that there is nothing in section 39 or any other provision of the Act to show that the Court can refuse to set aside an award only on an application made by a party but from a bare reading of section 17, it is clear that even the Court can suo motu set aside an award. Reliance was placed on the case of Chhabba Lal v. Kallu Lal and others (AIR 1946 PC 72). We are inclined to hold that in a fit case, the Court may on its own under section 17 of the Act modify or set aside the award if the facts and dictates of justice so demand."

7. He has also relied upon para. 17 of the judgment in the case of M/s. Awan Industries Limited (supra), which reads as follows:-- "17. But, in his submissions, he ignored the provisions of section 17 of the Arbitration Act, which imposes a duty on Courts to see that there is no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award. This can be done by the Court suo motu, apart from the application which a party may make for either remission of the award or its reversal. Where, therefore, an award is found to be nullity because of the invalidity of the arbitration agreement or, for any other reason, or the award is prima facie illegal and not fit to be maintained, the Court has power under section 17 of the Act to set it aside without waiting for the objection to award being filed or without considering any application for setting it aside, if there be any, and irrespective of the question whether or not any objection to the award was filed or whether the objection, if filed, was not within time. In such cases section 30, clause (c) of the Act is also attracted. Another example can be where a party appoints a sole arbitrator without prior notice to the other party, the award would be prima facie illegal and may be set aside. See Abdul Khaleq v. Province of East Pakistan and another PLD 1964 Dacca 166 and M/s. S.M. Fazail & Company v. M/s. Overseas Cotton PLD 1959 Kar.

739."

8. There is no doubt that a Court, while considering an award under section 17, suo motu can set aside an award without filing of any objection if it finds that the award is patently illegal and nullity in law. However, the question is, as to whether the above principle can be pressed into service in the present case. It may be observed that above section 17 of the Act empowers that Court to examine, whether there is any cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award and if it finds no cause for doing so, the Court is required after the time for making an application to set aside has expired or after refusing the application so made to proceed to pronounce the judgment according to the award. The above section does not relate to the jurisdiction of the Court as to where the award is to be filed. It refers to the merits of the award. It must, therefore, follow that under section 17 of the Act, the Court is required to examine the contents of the award and not the question, whether the award has been filed in the appropriate Court. It is, therefore, for the parties concerned to raise objection as to the jurisdiction of the Court where the award is filed unless the Court itself notices it and rethrns the award for filing it in the proper Court. Since in the present case no objection was raised by the appellant as to the jurisdiction of the Court nor the Court had noticed it, it was not open to the appellant to have raised the same before appellate or revisional Court in presence of above- quoted section 21 of C.P.C. In this view of the matter, the ratio decidendi of the above two cases is not attracted to in the present case.

9. The upshot of the above discussion is that the appeal is dismissed, but there will be no order as to costs.

Cited by 8 cases

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